Energy Complex Explodes–Here’s Why…

BOND MARKET RECAP

5/25/2005

June Bonds finished down 0-16 at 116-14, 0-26 off
the high and 0-07 up from the low.

June 10 Yr Treasury Notes finished down 0-090 at
112-230, 0-220 off the high and 0-050 up from the low.

The Treasury market saw the first
aggressive correction in weeks as the durable goods report seemed to undermine
the market early only to have Fed commentary later on add to the selling
impetus. It would seem as if most of the selling was long profit taking instead
of fresh outright position sales. The Fed reiterated that growth remained strong
and that unemployment was set to fall further and that probably caused some
concern in the long camp ahead of the next payroll report. With oil prices
rising sharply and equity prices mostly weak, we are surprised that the Treasury
market didn’t attempt to recover into the close.

Technical Outlook

BONDS (JUN) 05/26/2005: The market made a new
contract high on the rally. A crossover down in the daily stochastics is a
bearish signal. Daily stochastics turning lower from overbought levels is
bearish and will tend to reinforce a downside break especially if near term
support is penetrated. The market now above the 18-day moving average suggests
the longer-term trend has turned up. A negative signal was given by the outside
day down. The market’s close below the 1st swing support number suggests a
moderately negative setup for today. The next downside objective is 115-14. The
next area of resistance is around 116-26 and 117-19, while 1st support hits
today at 115-24 and below there at 115-14.

TNOTES (JUN) 05/26/2005: The market made a new
contract high on the rally. The daily stochastics gave a bearish indicator with
a crossover down. Momentum studies are trending lower from high levels which
should accelerate a move lower on a break below the 1st swing support. The
market now above the 18-day moving average suggests the longer-term trend has
turned up. The daily closing price reversal down puts the market on the
defensive. The close below the 1st swing support could weigh on the market. The
next downside objective is now at 111-310. The next area of resistance is around
113-020 and 113-215, while 1st support hits today at 112-070 and below there at
111-310.

 

STOCK INDICES RECAP

5/25/2005

June S&P finished down 1 at 1192.7, 0.1 off the
high and 6.2 up from the low.

June S&P E-Mini closed down 1.75 at 1192. This
was 5.75 up from the low and 1.75 off the high.

June Dow closed down 28 at 10473. This was 43 up
from the low and 22 off the high.

The stock market was lucky to have avoided more
significant selling pressure Wednesday, as the sharp run up in energy prices
added to the post Durable goods report concern for the economy. While the Fed
tried to soften the recent rate hike dialogue with suggestions that current
tightening action is simply tempering inflation, instead of battling a big
inflation threat, the market wasn’t in a position to respond to favorable
dialogue. The stock market was a little worried about comments from the Fed’s
Guynn that he was concerned about wild housing market speculation as that might
cause the Fed to focus on one of the stalwart performers of the US economy.

Technical Outlook

S&P 500 (JUN) 05/26/2005: Studies are showing
positive momentum but are now in overbought territory, so some caution is
warranted. The cross over and close above the 18-day moving average is an
indication the longer-term trend has turned positive. The market’s close below
the pivot swing number is a mildly negative setup. The near-term upside target
is at 1197.37. The next area of resistance is around 1195.65 and 1197.37, while
1st support hits today at 1189.35 and below there at 1184.78.

SP EMINI (JUN) 05/26/2005: Daily stochastics have
risen into overbought territory which will tend to support reversal action if it
occurs. The market now above the 18-day moving average suggests the longer-term
trend has turned up. It is a slightly negative indicator that the close was
under the swing pivot. The next upside objective is 1198.50. The next area of
resistance is around 1195.75 and 1198.50, while 1st support hits today at
1188.25 and below there at 1183.50.

NASDAQ (JUN) 05/26/2005: Rising stochastics at
overbought levels warrant some caution for bulls. The market now above the
18-day moving average suggests the longer-term trend has turned up. The market
tilt is slightly negative with the close under the pivot. The next upside
objective is 1547.87. The market is approaching overbought levels with an RSI
over 70. The next area of resistance is around 1544.25 and 1547.87, while 1st
support hits today at 1531.75 and below there at 1522.88.

 

CURRENCY MARKET RECAP

5/25/2005

June US Dollar finished down 4 at 8635, 22 off
the high and 20 up from the low.

June Euro finished up 0.12 at 126.06, 0.2 off the
high and 0.49 up from the low.

June Euro Dollar closed unchanged at 96.58. This
was 0.005 up from the low and 0.01 off the high.

June Canadian Dollar closed down 0.17 at 79.17.
This was 0.17 up from the low and 0.37 off the high.

June British Pound finished up 0.36 at 182.99,
0.18 off the high and 0.6 up from the low.

June Swiss closed up 0.1 at 81.58. This was 0.28
up from the low and 0.17 off the high.

June Japanese Yen closed down 0.24 at 92.98. This
was 0.12 up from the low and 0.27 off the high.

The Dollar once again struggled and the trade
continued to fret over the recent loss of bullish momentum because of the
failure to forge new highs. Initially the Dollar was lifted by the durable goods
release but once the oil market took off and US equity prices slid aggressively
the Dollar lost traction. Supporting the Euro during the session Wednesday were
comments from the ECB President that there would be no Euro zone rate cut in the
near term. The Dollar might have been partially undermined by Fed comments
suggesting that China was “ready” to move to a flexible currency program as that
could naturally foster depreciation in the Dollar.

Technical Outlook

YEN (JUN) 05/26/2005: Momentum studies are still
bearish but are now at oversold levels and will tend to support reversal action
if it occurs. The major trend has turned down with the cross over back below the
18-day moving average. The swing indicator gave a moderately negative reading
with the close below the 1st support number. The next downside objective is now
at 92.63. The next area of resistance is around 93.17 and 93.40, while 1st
support hits today at 92.79 and below there at 92.63.

EURO (JUN) 05/26/2005: Rising from oversold
levels, daily momentum studies would support higher prices, especially on a
close above resistance. The close below the 18-day moving average is an
indication the longer-term trend has turned down. The daily closing price
reversal up is a positive indicator that could support higher prices. The close
over the pivot swing is a somewhat positive setup. The next upside target is
126.67. The next area of resistance is around 126.40 and 126.67, while 1st
support hits today at 125.72 and below there at 125.30.

 

PRECIOUS METALS RECAP

5/25/2005

June Gold closed up 1.2 at 418.9. This was 1.8 up
from the low and 0.1 off the high.

July Silver finished up 0.135 at 7.138, 0.017 off
the high and 0.138 up from the low.

 

We think the action in the gold market was
impressive on Wednesday, as the Dollar didn’t really give off a definitive
direction and most of the metals were strong despite the continued slide in
equity prices. It would almost seem as if the industrial precious metals, silver
and copper are getting commensurately more trading interest than gold and that
clearly suggests that the flight to quality focus and the Dollar impetus isn’t
nearly as strong as the forces driving silver up and down. During the session
Wednesday the silver market was apparently lifted by the World Silver Survey
that suggesting that annual ending contracted mostly off slightly lower supply
data. Some players think the silver market has already factored some of the
tightness from last year and others suggest that silver prices remain mostly
deflated.

Technical Outlook

SILVER (JUL) 05/26/2005: The major trend could be
turning up with the close back above the 40-day moving average. A bullish signal
was given with an upside crossover of the daily stochastics. Momentum studies
are trending higher from mid-range, which should support a move higher if
resistance levels are penetrated. The cross over and close above the 18-day
moving average is an indication the longer-term trend has turned positive. With
the close over the 1st swing resistance number, the market is in a moderately
positive position. The near-term upside objective is at 726.3. The next area of
resistance is around 721.6 and 726.3, while 1st support hits today at 706.1 and
below there at 695.3.

GOLD (JUN) 05/26/2005: Momentum studies are
declining, but have fallen to oversold levels. The market back below the 18-day
moving average suggests the longer-term trend could be turning down. The daily
closing price reversal up on the daily chart is somewhat positive. Market
positioning is positive with the close over the 1st swing resistance. The next
downside objective is 416.6. The next area of resistance is around 419.8 and
420.3, while 1st support hits today at 418.0 and below there at 416.6.

 

COPPER MARKET RECAP

5/25/2005

June Copper closed up 0.85 at 146.15. This was
1.15 up from the low and equal to the high.

The copper market performed impressively again
and did so in the face of disappointing US equity market action and a
questionable US durable goods report. We also have to think that ongoing gains
in energy prices could rekindle concerns for global copper demand growth. A few
players are beginning to note that LME copper stocks have once again started to
decline and that could mean that the tightness pattern has returned. Copper
prices might also have gotten some support Wednesday from news of labor problems
in Peru.

 

ENERGY MARKET RECAP

5/25/2005

July Crude Oil closed up 1.31 at 50.98. This was
1.33 up from the low and 0.62 off the high.

July Heating Oil closed up 3.99 at 143.63. This
was 4.58 up from the low and 1.67 off the high.

July Unleaded Gas finished up 2.61 at 145.38,
1.62 off the high and 3.58 up from the low.

July Natural Gas finished down 0.01 at 6.37, 0.08
off the high and 0.06 up from the low.

July Propane closed up 0.01 at 0.80. This was
equal to the low and equal to the high.

The energy complex exploded Wednesday off what
appeared to be more OPEC production cut hints and because the weekly inventory
report failed to come in patently bearish. Both Qatar and Iran seemed to call
for a production cut, while the Qatar Oil Minister might be appeased by some
plan that would deflect ongoing inventory builds or at least become proactive in
the event that the rebuilding continues. Some traders pointed to the modest
decline in EIA gasoline inventories as the main catalyst of the run up in prices
and that was stimulated by additional comments from the EIA that crude oil
stocks might be set to fall quickly. However, EIA crude stocks fell -1.7 million
barrels and are now 31.8 million barrels above year ago stock levels. However,
crude stocks stand 7.9 million barrels above the 13 year average. Alternatively,
API showed crude stocks rose 2.28 million barrels bringing stocks to 33.7
million barrels above last year’s levels. API has reported a rise in crude
stocks 11 out of the last 13 weeks. Over the last 4 weeks, EIA crude stocks are
up a combined 8.0 million barrels.

Technical Outlook

CRUDE OIL (JUL) 05/26/2005: The stochastics
indicators are rising from oversold levels, which is bullish and should support
higher prices. The major trend could be turning up with the close back above the
18-day moving average. There could be more upside follow through since the
market closed above the 2nd swing resistance. The near-term upside target is at
52.75. The next area of resistance is around 51.95 and 52.75, while 1st support
hits today at 50.01 and below there at 48.86.

UNLEADED (JUL) 05/26/2005: The stochastics
indicators are rising from oversold levels, which is bullish and should support
higher prices. The close below the 18-day moving average is an indication the
longer-term trend has turned down. The market has a bullish tilt coming into
today’s trade with the close above the 2nd swing resistance. The next upside
target is 150.09. The next area of resistance is around 147.97 and 150.09, while
1st support hits today at 142.78 and below there at 139.69.

HEATING OIL (JUL) 05/26/2005: Momentum studies
are rising from mid-range, which could accelerate a move higher if resistance
levels are penetrated. The cross over and close above the 18-day moving average
indicates the longer-term trend has turned up. The market’s close above the 2nd
swing resistance number is a bullish indication. The next upside target is
149.15. The next area of resistance is around 146.75 and 149.15, while 1st
support hits today at 140.51 and below there at 136.66.

 

CORN MARKET RECAP

5/25/2005

July Corn finished up 1 1/2 at 222 3/4, 4
3/4 off the high and 4 1/4 up from the low. December Corn closed up 1 1/2 at 239
3/4. This was 4 up from the low and 4 1/4 off the high.

The weather concerns for slow growing crops due
to cool temperatures and dryness in the eastern cornbelt helped support the jump
on the opening and funds returned as more active buyers with the improved
technical picture. Traders perceive the need for a larger weather premium as the
trade sees the progress of the corn plant during May as a reason to suspect that
the crop might need to pollinate later in July or even early August. Concerns
that the crop will need to pollinate in more stressful middle-of-the-summer
weather condition has helped provide fundamental support to the rally. The
European Commission this morning indicated that a cargo of US corn gluten feed
was impounded at a port in Ireland due to contamination of BT-10 which is an
illegal GMO strain. This could develop into negative demand news for US corn.
Israel bought 40,000 tonnes of optional origin corn overnight. For the weekly
export sales report, released before the opening, traders are looking for corn
sales near 600,000-925,000 tonnes as compared with 854,000 tonnes last week. The
Senate Agriculture Committee voted to require US ethanol production to reach at
least 8 billion gallons per year by 2012 which is double to current output.
Funds were noted buyers of near 15,000 contracts by mid-session. July corn
support comes in at 218 and 215 1/4 with 224 1/2 and 230 1/4 as next resistance.

Technical Outlook

CORN (JUL) 05/26/2005: Momentum studies are
trending higher but have entered overbought levels. The major trend could be
turning up with the close back above the 18-day moving average. The market has a
slightly positive tilt with the close over the swing pivot. The near-term upside
target is at 231 3/4. The next area of resistance is around 227 1/4 and 231 3/4,
while 1st support hits today at 218 1/4 and below there at 214.

 

SOY COMPLEX RECAP

5/25/2005

July Soybeans finished up 21 at 666 1/2, 1 1/2
off the high and 15 1/2 up from the low. November Soybeans closed up 19 1/2 at
665 1/2. This was 14 1/2 up from the low and 1/2 off the high.

July Soymeal closed up 9 at 207.7. This was 6.7
up from the low and 0.3 off the high.

July Soybean Oil finished up 0.38 at 23.25, 0.14
off the high and 0.25 up from the low.

The outlook for cool and dry weather for the
central and eastern cornbelt helped spark the higher opening and the move to the
highest level since March for the July contract and a new contract high for the
November contract helped trigger a series of buy-stops which drove the market
sharply higher on the day. Funds returned as aggressive buyers into the close
after the market held minor support on a mid-session set-back in wheat and corn.
The bullish technical action at this time of the year is attracting new buying
from fund traders. Midwest basis levels were mostly steady to lower as country
locations adjust to the higher supply flow from the more active producer selling
earlier this week. With the exchange closed on Monday and the trade concerned
with a slow start to the crop and with developing dry conditions for the eastern
cornbelt, short-covering was also more active on the bullish technical action.
Demand factors will be the focus for tomorrow morning with export sales and the
monthly Census crush report out before the opening. In both cases, the weekly
and monthly data (if Census confirms bullish NOPA data) could give the USDA
reason to increase usage in the next USDA supply/demand report. For the weekly
export sales report, released before the opening, traders are looking for
soybean sales near 250,000-350,000 tonnes as compared with 377,000 tonnes last
week. Meal sales are expected near 50,000-100,000 tonnes and oil sales near
0-5,000 tonnes. For the US Census crush report, traders are looking for the
April crush to come in near 141.7 million bushels as compared with 149.7 million
bushels last month and 112.5 million bushels last year. July soybean support
moves up to 661 3/4 and 653 with 678 and 696 as resistance.

Technical Outlook

BEANS (JUL) 05/26/2005: The upside crossover (9
above 18) of the moving averages suggests a developing short-term uptrend.
Studies are showing positive momentum but are now in overbought territory, so
some caution is warranted. The cross over and close above the 18-day moving
average indicates the longer-term trend has turned up. Follow through buying
looks likely if the market can hold yesterday’s gap on the day session chart.
Since the close was above the 2nd swing resistance number, the market’s posture
is bullish and could see more upside follow-through early in the session. The
near-term upside objective is at 680. With a reading over 70, the 9-day RSI is
approaching overbought levels. The next area of resistance is around 675 and
680, while 1st support hits today at 658 and below there at 646.

MEAL (JUL) 05/26/2005: Rising stochastics at
overbought levels warrant some caution for bulls. The market now above the
18-day moving average suggests the longer-term trend has turned up. The gap up
on the day session chart gave a bullish indicator and more follow through could
be seen this session. There could be more upside follow through since the market
closed above the 2nd swing resistance. The near-term upside target is at 213.1.
With a reading over 70, the 9-day RSI is approaching overbought levels. The next
area of resistance is around 211.2 and 213.1, while 1st support hits today at
204.2 and below there at 199.1.

BEANOIL (JUL) 05/26/2005: The major trend could
be turning up with the close back above the 60-day moving average. Momentum
studies are trending higher from mid-range, which should support a move higher
if resistance levels are penetrated. The cross over and close above the 18-day
moving average is an indication the longer-term trend has turned positive.
Follow through buying looks likely if the market can hold yesterday’s gap on the
day session chart. The market has a bullish tilt coming into today’s trade with
the close above the 2nd swing resistance. The next upside target is 23.61. The
next area of resistance is around 23.44 and 23.61, while 1st support hits today
at 23.06 and below there at 22.84.

 

WHEAT MARKET RECAP

5/25/2005

July Wheat finished down 1 3/4 at 330 1/4, 9 1/2 off the high
and 4 3/4 up from the low. December Wheat closed down 1 3/4 at 349 3/4. This was
4 1/4 up from the low and 9 3/4 off the high.

The market was called lower just ahead of the
opening but sharp gains in the other grain markets supported the solid gains
into the mid-session. Rains of the past two sessions in the winter wheat belt
helped ease crop stress concerns but there is also talk that the rains came too
late to help reverse conditions. With strength in the other grains, bullish
technical action this week and a continued dry weather forecast for Eastern
Australia, speculative buying was more active early in the session but failure
to move through 340 basis July triggered selling. The Philippines bought 40,000
tonnes of US milling wheat overnight and are looking to buy 120,000 tonnes. For
the weekly export sales report, released before the opening, traders are looking
for wheat sales near 200,000-400,000 tonnes as compared with 302,200 tonnes last
week. The outside day down after testing the May highs is a bearish technical
development. July wheat resistance comes in at 334 and 339 with support at 321
and 316 3/4.

Technical Outlook

WHEAT (JUL) 05/26/2005: The close under the
60-day moving average indicates the longer-term trend could be turning down. The
upside crossover (9 above 18) of the moving averages suggests a developing
short-term uptrend. Momentum studies are trending higher from mid-range, which
should support a move higher if resistance levels are penetrated. The major
trend could be turning up with the close back above the 18-day moving average.
The market could take on a defensive posture with the daily closing price
reversal down. The market tilt is slightly negative with the close under the
pivot. The near-term upside target is at 345 1/2. The next area of resistance is
around 337 1/4 and 345 1/2, while 1st support hits today at 323 1/4 and below
there at 317 1/4.

 

LIVE CATTLE RECAP

5/25/2005

June Live Cattle finished up 0.15 at 84.60, 0.05
off the high and 0.40 up from the low.

May Feeder Cattle closed down 0.30 at 111.02.
This was 0.12 up from the low and 0.17 off the high.

The cattle market close slightly higher in quiet
trade finding some support from short-covering on ideas the market is oversold.
The discount of futures to cash added to the positive tone. Cash markets traded
$3.00 lower on the week in Nebraska on a dressed basis which suggests that
plains cattle could trade $1.00 lower this week. Cattle in the plains were bid
at $86 with offers at $90 as compared with $89.00 last week. At mid-session,
boxed beef cutout values were down $.36 on the day to $155.11 as compared with
$156.28 one week ago. Slaughter came in at 120,000 head as compared with trade
expectations of 123,000-126,000 head.

Technical Outlook

CATTLE (JUN) 05/26/2005: Momentum studies are
still bearish but are now at oversold levels and will tend to support reversal
action if it occurs. The close below the 18-day moving average is an indication
the longer-term trend has turned down. The daily closing price reversal up on
the daily chart is somewhat positive. It is a mildly bullish indicator that the
market closed over the pivot swing number. The next downside objective is now at
84.070. The next area of resistance is around 84.820 and 84.950, while 1st
support hits today at 84.400 and below there at 84.070.

 

LEAN HOGS RECAP

5/25/2005

June Lean Hogs finished down 0.30 at 71.65, 0.22
off the high and 0.80 up from the low.

May Pork Bellies closed up 2.20 at 76.70. This
was 2.40 up from the low and equal to the high.

July Hogs closed higher with June lower on the
day. July hogs experienced a reversal with the higher close as the market
managed a new low for the year and managed to fill a gap from December before
the higher close. The bullish weekly cold storage report supported strong gains
in bellies which helped support as well. For the week ending May 21st, weekly
average weights for Iowa/Minnesota came in at 268.2 pounds as compared with
267.8 pounds last week and 263.9 pounds last year at this time. The data
suggests that producers may have held back a few hogs from the market and that
total pork production might creep higher in the weeks ahead. The CME 2-Day Lean
Index for the period ending May 23rd came in at 75.60 which was down.54 from the
previous session and down from 76.53 one week ago. Slaughter came in at 386,000
head as compared with trade expectations of 382,000-387,000 head.

Technical Outlook

HOGS (JUN) 05/26/2005: Daily stochastics are
trending lower but have declined into oversold territory. The major trend has
turned down with the cross over back below the 18-day moving average. The
market’s close below the pivot swing number is a mildly negative setup. The next
downside objective is now at 70.500. Some caution in pressing the downside is
warranted with the RSI under 30. The next area of resistance is around 72.150
and 72.520, while 1st support hits today at 71.150 and below there at 70.500.

 

COCOA MARKET RECAP

5/25/2005

July Cocoa finished down 7 at 1429, 21 off the
high and 2 up from the low.

More weakness in cocoa was more than likely the
result of open progression on the Ivory Coast disarmament process. Apparently
the Press was picking up actual disarmament action and that would seem to
extract even more uncertainty premium from the price of cocoa. It is also
possible that a sharp daily increase in CSCE cocoa stocks added an element of
bearishness into the equation. All and all, seeing political tensions deflate in
Africa, at the same time that mid crop conditions are steadily improving would
seem to give the bear camp ongoing control over prices.

Technical Outlook

COCOA (JUL) 05/26/2005: A bearish signal was
triggered on a crossover down in the daily stochastics. Momentum studies are
declining, but have fallen to oversold levels. The close under the 18-day moving
average indicates the longer-term trend could be turning down. The market’s
close below the pivot swing number is a mildly negative setup. The next downside
target is now at 1411. The next area of resistance is around 1440 and 1456,
while 1st support hits today at 1418 and below there at 1411.

 

COFFEE MARKET RECAP

5/25/2005

July Coffee closed up 2.75 at 122.40. This was
1.90 up from the low and 0.60 off the high.

An upside breakout fostered ideas of longer term
technical buying. Certainly it would seem that some fund buyers were part of the
reason behind the rally on Wednesday as the market extended through an old gap
area left around mid month. Trouble at a Brazilian coffee COOP might have
prompted fears that some coffee might be thrown back onto the market, but it
would seem that the rally Wednesday was largely off developments unrelated to
the COOP. We suspect that some seasonal shorts were forced from the market with
the late May rally turning the tables on the technical players. Increased
moisture fears might be rekindling quality concerns in a similar fashion to last
year. Lastly a 5 1/2 year high in London coffee early in the action certainly
gave US buyers incentive to get long or liquidate shorts.

Technical Outlook

COFFEE (JUL) 05/26/2005: Positive momentum
studies in the neutral zone will tend to reinforce higher price action. The
market now above the 18-day moving average suggests the longer-term trend has
turned up. With the close over the 1st swing resistance number, the market is in
a moderately positive position. The near-term upside objective is at 124.55. The
next area of resistance is around 123.65 and 124.55, while 1st support hits
today at 121.20 and below there at 119.60.

 

SUGAR MARKET RECAP

5/25/2005

July Sugar closed up 0.11 at 8.73. This was 0.16
up from the low and 0.01 off the high.

October sugar held minor support on the early
break and saw active buying from trade houses and speculators to support a
strong close and a move to the highest level since April 8th. Active demand from
Russia and Indonesia and continued talk that China could eventually be in the
market for sugar imports helped support. China internal sugar prices have been
on the rise but the government has released reserves in an attempt to hold
prices down. For the first 29 weeks of the 2004/2005 season, Mexico has produced
5.5 million tonnes, up 13% from last year.

Technical Outlook

SUGAR (JUL) 05/26/2005: The market now above the
60-day moving average suggests the longer-term trend has turned up. The moving
average crossover up (9 above 18) indicates a possible developing short-term
uptrend. Daily stochastics have risen into overbought territory which will tend
to support reversal action if it occurs. The cross over and close above the
18-day moving average is an indication the longer-term trend has turned
positive. The market’s close above the 2nd swing resistance number is a bullish
indication. The near-term upside objective is at 8.86. The next area of
resistance is around 8.81 and 8.86, while 1st support hits today at 8.65 and
below there at 8.53.

 

COTTON MARKET RECAP

5/25/2005

July Cotton finished up 0.29 at 50.37, 0.08 off
the high and 0.50 up from the low.

December cotton closed slightly higher in choppy
trade with an inside day. A lack of trade from funds or from trade houses may
have kept volume slow. For the weekly export sales report, released before the
opening, traders are looking for cotton sales near 325,000-380,000 bales as
compared with 364,400 bales last week. For shipments, traders are looking for
300,000-400,000 bales as compared with 265,400 bales last week. Certified stocks
deliverable to the exchange as of May 24th increased to 282,951 bales from
268,226 bales the previous session.

Technical Outlook

COTTON (JUL) 05/26/2005: Daily stochastics
declining into oversold territory suggest the selling may be drying up soon. The
market back below the 18-day moving average suggests the longer-term trend could
be turning down. With the close higher than the pivot swing number, the market
is in a slightly bullish posture. The next downside target is now at 49.69. The
next area of resistance is around 50.66 and 50.84, while 1st support hits today
at 50.08 and below there at 49.69.